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- Hard red spring (HRS) futures prices rallied week-over-week on crop quality concerns due to heavy rainfall in the Northern Plains. Hard red winter (HRW) futures were unchanged from last week and soft red winter (SRW) futures closed slightly higher on short-covering and technical selling. HRS December futures gained 23 cents to close at $5.47/bu. HRW December futures ended at $4.07/bu, unchanged from last week. SRW December futures closed up 3 cents to close at $4.87/bu. CBOT December corn futures gained a penny to end at $3.71/bu. CBOT January soybean futures gained a penny to close at $8.97/bu.
- Crop quality concerns due to rain on unharvested fields increased HRS export basis out of the Pacific Northwest (PNW), Gulf and Great Lakes for all delivery periods. Minimal farmer selling offset low export demand and held PNW and Gulf HRW export basis steady week-over-week for October and November deliveries.
- On September 23, USDA reported spring wheat harvest at 87% complete compared to 99% last year and the 5-year average of 97%. U.S. winter wheat is 22% planted to 26% last year and the 5-year average of 24%.
Commercial Sales - Net U.S. wheat sales of 283,000 metric tons (MT) as of September 19 were 1% lower than last week’s 287,000 MT and in line with trade expectations of 200,000 MT to 500,000 MT. Year-to-date commercial sales of 12.6 million metric tons (MMT) are 16% ahead of last year’s pace. USDA currently forecasts 2019/20 U.S. wheat exports will total 26.5 MMT, 4% more than 2018/19, if realized.
- Click here to view the most recent USW Commercial Sales report.
U.S. Drought Monitor
– The U.S. Drought Monitor indicates that ongoing record heat in the Southeast, Middle Atlantic and eastern Midwest SRW production regions is increasing drought conditions. It continues to be drier than average in Southwest Kansas, but more rain is forecast for farmers seeding HRW in the rest of Kansas into Nebraska. Steady showers have eliminated drought conditions from eastern Washington state into Idaho, Montana, North Dakota, South Dakota and Minnesota.
- As of September 23, Russia’s Ministry of Agriculture reported the country’s wheat harvest now totals 70.2 MMT compared to 63.9 MMT this time last year. USDA estimated that Russian wheat production will total 73.0 MMT in 2019 while Russia’s Ministry of Agriculture raised its estimate for total production from 75.0 MMT in August to 78.0 MMT in September.
- Ukraine’s Ministry of Agriculture reported Ukrainian total wheat exports, as of September 24, at 7.70 MMT. USDA estimates Ukraine will export 19.0 MMT of wheat in marketing year 2019/20, up 21% from 2018/19 levels, if realized. So far, all Ukrainian grain exports total 12.4 MMT, up 49% from this time last year.
- On September 26, Australia’s Bureau of Meteorology (BOM) announced that Australia’s east coast wheat production region could experience another three months of hot, dry weather. USDA currently expects Australian wheat exports will total 10,5 MMT, up 14% from last year, if realized, but 33% below the 5-year average of 15.6 MMT.
- The Buenos Aires Grains Exchange predicts Argentina’s 2019/20 wheat harvest will reach a record 21.0 MMT compared to last year’s 19.5 MMT. USDA predicts Argentinian wheat exports will total 14.5 MMT this marketing year, 15% higher than last year’s 12.3 MMT and 35% higher than the 5-year average of 10.7 MMT, if realized.
Baltic and U.S. Dollar Indices - The Baltic Dry Index fell 9% week-over-week to close at 1,963.
- The U.S. Dollar Index jumped from last week’s 98.51 to close at 99.26.
Source: US Wheat Associates